When it rains, it pours. Of course, I am speaking figuratively. The weather here in Alaska is gorgeous with nearly 16 hour days now.
I am taking about the weakness of the United States around the globe. Even major news such as the death of Osama bin Laden didn't allow the U.S. dollar to strengthen. It started of getting stronger as the news broke, but soon turned into another dollar-selling event.
I wanted to talk to you about the weakness that the United States is facing around the world and how relative minions are taking liberties with the United States, where even a decade ago, this would have been unthinkable.
Late last weak, I was studying the Indian stock-market moves and the news broke across the Indian channels that India has decided to exclude two American companies, Boeing and Lockheed Martin, from its estimated $11 billion 126 fighter jet deal. I was astounded that India could afford to turn down the U.S. fighter-jet technology.
What was not lost on me was the timing of such news. It was only a few months ago that President Barack Obama made a highly publicized and visible trip to India to ask for more business ties and jobs. Granted, India is a relatively smaller buyer in the global arms market, but yet the gall of such a major decision talks volumes of the confidence of India on the global stage.
When you put the various seemingly unrelated pieces of the geo political puzzle together, the emerging picture is rather appalling. Not only did India reject the American companies from the running, but just a few weeks ago prior to this, the BRICS (Brazil, Russia, India, China and South Africa) had gathered in China for their second summit.
At this summit, the countries signed bilateral trade deals with each other and eliminated the U.S. dollar in their trade activities. They were also openly critical (remember the Asian culture isn't one where you openly criticize) about the U.S. monetary policy and exhibited extreme concern about the U.S. deficits.
What a mess we have gotten ourselves into. Just a decade or two ago, it would have been unthinkable for the India government to deny American companies from competing for fighter jet orders, or for any two countries to sign bilateral business agreements which eliminated the U.S. dollar from being the trade currency.
Just as we weaken (geo politically) and have less than exemplary tactical trade weapons to dominate the globe, we see challenges to the U.S. dominance around the globe from emerging forces such as India, Brazil and China.
The only way we can save the American dominance over the world is to discipline our spending habits. And the more time we make excuses and avoid making hard decisions, the longer we will take to recover, or maybe leave it too late to recover at all.
Stay focused on exiting the U.S. dollar in a measured way with strategic investments overseas.
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